Intelsat sale: VSNL to get Rs 786 cr

VSNL will make a profit of Rs 530 crore from the sale.

The Tata-group's Videsh Sanchar Nigam Ltd (VSNL) is likely to receive around Rs 786 crore ($169 million) from the sale of its 5.42 per cent stake in US satellite company Intelsat.

VSNL will make a profit of over Rs 530 crore from the sale since it had bought the stake for Rs 254 crore in 2001. News of the sale sent the VSNL stock soaring 9.52 per cent to Rs 173.15 at close, off the day's high of Rs 176.80.

VSNL was a founder-member of the consortium of international telecom companies that had invested in the Bermuda-registered Intelsat. Intelsat today signed a definitive agreement with Zeus Holdings, a four-member consortium of private equity funds, for a $5 billion takeover.

The private equity funds include two of UK's biggest buyout firms, Apax Partners and Permira, and the US-based Apollo Management and Madison Dearborn Partners. Intelsat's shareholders will receive $18.75 for a share issued or a total of $3 billion in cash.

The acquirers will assume the $2 billion of Intelsat's existing net debt.

The sale of Intelsat was unanimously approved by its board today and the transfer was expected to be completed by the end of December.

However, VSNL informed stock exchanges that the company had "not yet received any official communication from Intelsat but will consider the same appropriately in the eventuality of any communication being received from Intelsat".

In its annual report, VSNL has stated that "it will continue to review the possibility of offering is own shares for sale accordingly, at the appropriate time."

Intelsat had earlier planned an initial public offering and offered its initial shareholders the opportunity to place their shares for sale in a post-IPO secondary offering.

The US government had extended the deadline for the IPO to December 31, 2005. However, the company decided to pursue an outright sale to a new owner.

Intelsat provides services in over 200 countries and territories and helps service providers, broadcasters, corporations and governments  deliver information and entertainment across the globe.